||Asean Affairs 24 July 2013
Singapore's headline inflation rises 1.8% on-year in June
SINGAPORE: Singapore's headline inflation edged up for the second straight month in June, on the back of rising petrol pump prices.
The Monetary Authority of Singapore (MAS) said CPI-All Items inflation climbed 1.8 per cent year-on-year in June, up from 1.6 per cent in May.
Singapore's headline inflation had reached a three-year low of 1.5 per cent in April.
Rising petrol pump prices were a key contributor in June, increasing after three consecutive months of price corrections. But electricity tariffs remained 7.2 per cent lower compared to a year earlier.
Overall, MAS said the price of oil-related items fell by 1.0 per cent in June, compared to a larger decline of 4.4 per cent in May.
Services inflation also gained strength, coming in at 2.7 per cent in June from 2.5 per cent in May. MAS said this is due to rising costs for medical insurance and holiday travel.
Food inflation was stable at 2.0 per cent, but prices of meals at hawker centres and restaurants rose at a slightly faster pace, compared to non-cooked food items.
Private road transport cost fell 2.1 per cent in June. It had dropped 3.7 per cent in May.
MAS said this moderation reflects the smaller drop in COE premiums in May on a year-on-year basis, as the market continued to adjust to policies introduced in February.
Accommodation cost inflation was 4.8 per cent in June, down from 5.1 percent in May.
MAS core inflation, which excludes the costs of accommodation and private road transport, stayed at 1.7 per cent in June. A pickup in services inflation was offset by lower prices in retail-related items like clothing and footwear.
Looking ahead, MAS said domestic cost pressures are expected to persist over the rest of the year.
As such, MAS said core inflation is expected to rise moderately in the second half of the year and average 1.5 per cent to 2.5 per cent in 2013.
Imputed rentals on owner-occupied accommodation will continue to add significantly to CPI-All Items inflation although MAS believes the pace of increase will be slower in the second half of this year.
Car prices are significantly lower following the introduction of the various motor vehicle-related policy measures, although they have picked up recently.
As a result, the MAS said it has revised its CPI-All Items inflation forecast for the year down to 2-3 per cent, from 3-4 per cent previously.